In the late 1960s and early ’70s, Xerox Corp.’s Palo Alto, California, research and development labs created embryonic versions of what would become the personal computer. But Xerox didn’t capitalize on the opportunity. Executives only saw Xerox as the leading copier company, and no amount of effort by the Palo Alto engineers and researchers could change their minds.
Instead, young entrepreneurs like Steven Jobs and Bill Gates incorporated Xerox’s leading-edge ideas into their own work. Today, Xerox is in a catch-up position within the computer industry, rather than leading it.
The voice of the customer, a key component of the customer-centric organization, wasn’t a focus. The combined strength of staff beliefs and customer interest weren’t sufficient to move Xerox executives to support and encourage the development activity.
Companies succeed in their markets—and succeed in keeping the customers they want and leveraging their behavior—by using mechanisms that enable them, at all times, to be as close to their customers as possible. Perhaps the best ways to do this are through flatter organizational structures and formation of “customer first” teams.
It’s safe to say that most companies give little or no thought to creating a team-based culture that optimizes employees’ efforts to create customer loyalty and advocacy or keep customers from defecting.
Creating a team-based customer culture requires understanding the customer and reflecting that understanding in structure and systems. You should ask two key questions:
- How well and how often is teamwork directed at the goal of customer loyalty and advocacy behavior?
- What approaches can be taken to move from a traditional hierarchical structure to become customer focused?
Although somewhat rare, there are companies that have created teams with the intimate involvement of the customer. Examples of this are Southwest Airlines, where customers are included in teams making personnel hiring decisions and Chrysler Corporation, where its Design Center has customers participate with teams of technical company specialists in developing new vehicle concepts.
In the car rental industry, one company created a cross-functional team that included customers to address a major customer headache: transaction time involved in the rental itself. One result of the team’s work was the upgraded service that enabled customers to be taken directly to their vehicles without having to stand in line or fill out paperwork.
The guiding vision of former CEO Louis Gerstner was to make IBM the information technology company for America’s corporations. Gerstner said, “I came here with the view that you start the day with customers; that you start thinking about a company around its customers; and you organize around customers.” Much of IBM’s new focus, commitment and service orientation has been achieved through a more team-based architecture.
In the basement of IBM’s Almaden Research Center in San Jose, David Gee heads a team of 12 staffers whose mission has been to reinvent how the company does business. Their program, alphaWorks, is IBM’s “online laboratory,” created to change how the company commercializes products and communicates with customers. As Gee says, “Part of our job is to shake up the status quo. We want to get in trouble. We bend the rules.”
Gee’s team has assembled a network of more than 60,000 users, who get to demo and experiment with alphaWorks’ new ideas. In other words, the team has found a way to incorporate customers directly into the development and follow-up operational support aspects of its programs.
That has made a significant impact on the rest of the company. As Gee said, “I’m not going to tell you that we’ve changed the world. But, we are making a difference. And in a company this size, even a small win is a huge victory.” If a large company like IBM can see the advantages of customer-first teams, any company can.
The Math Works in Natick, Massachusetts, is a matrix-run company where every employee is on multiple cross-functional teams. A leading developer of high-level math software, The Math Works has several hundred staff and more than 100,000 customers. Ellizabeth Haight, The Math Works’ vice president of operations, spearheaded the structural move to teams several years ago. “Title doesn’t mean much here,” Haight said. “The goal here is to get the right people with the right knowledge in the room, not to get the people with the right title in the room.
Haight believes that much of the success of the cross-functional teams and value-driven culture is because it is backed by the company president. “The president lives these values, and I think that’s where a lot of companies go wrong. They discover what they are; they roll the values out; and then the executive group goes off and behaves in any manner they want.”
The best teams
Companies have lots of options with loyalty-enhancing project teams. There could be a team that examines products and services for potential negative impact on customer loyalty. Team members would evaluate trends in usage of the product or service by product group, setting up or drawing from a database of customer information on their usage and perhaps conducting original qualitative or quantitative research or getting direct input from current or former customers.
Another team might look at communication methods and contact processes. Are there elements of the company’s customer service techniques, such as the words or the tone representatives use with customers, that can be improved? Are hiring and training practices optimal? Is it easy or difficult to reach the supplier?
By finding out where the staff requires training or where processes need improvement, you can greatly increase the value, as you can by having the most customer-oriented staff. Does the company have listening posts for regularly hearing the customer’s voice and understanding how customers feel about the company and its competitors? These can certainly be a team focus.
The array of cross-functional, customer-first team possibilities is limited only by an organization’s willingness to embrace the concept. Bottom-line: Customer-first teams enhance loyalty behavior.